Will concern for jobs threaten mechanical handling's future?
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New social pressures may limit labour saving devices
THE conference arranged last week in conjunction with the Mechanical Handling Exhibition by IPC Business and Industrial Training Ltd was opened by Mr Don Ryder, chairman of Reed International. Mr Ryder's ideas for the next 10 years were in marked contrast to those of the first speaker, Dr E. F. Schumacher. The capacity audience were thoroughly roused by the stimulating addresses of the openers and throughout the day platform speakers and delegates returned to some of the important themes raised earlier.
Dr Schumacher's subject was "Economic Pressures in the 70s", and he began by asserting that in his view there had never been a time when prediction was more difficult. Able people told us to streamline our operations, get rid of surplus labour, adopt more logical and logistical systems, centralize activities, speed up administrative controls, reduce stockholding, etc. We were recommended to think big, anticipating the predominance of international and multinational companies. These could lead to economies of scale and standardization. We were urged to think modern and have regard to automation, computerization and scientific forecasting.
Equally able people, however, believed that the future would not be simply a continuation or extrapolation of the past. On the contrary, they believed that the next decade would be about the environment, ecology and pollution, the "limits to growth", the alienation of youth, of workers and others.
It could be about workers' participation in management, about decentralization — "small is beautiful", about bottlenecks in world-wide resources, and so forth.
These two lines of argument, neither of which could be dismissed as nonsense, never seemed to meet.
Dr Schumacher believed that unemployment would be far more difficult to get rid of than it had been previously with the result that entirely novel kinds of social pressures would be set up. "How do you combine your legitimate and indeed necessary concern for productivity, le labour saving, with a wider social concern for full employment, ie labour using? The mechanical handling industry could easily become the first victim of such pressures." There may well be strenuous resistance against the kind of rationalization which is the pride and know-how of this industry. "Managements may become reluctant to • spend money on labour-saving in such a situation because they may be too uncertain — or even too certain — about union reactions."
In contrast to these gloomy sociological deductions, Mr Ryder was much more optimistic. He saw the future in terms of the dominance of a hundred or so multinational companies supported by a few specialist companies. But he felt that "middle band" companies would not exist in the long run. The distribution of the vast productivity of modern industry would mean that twice the number of lorries and associated warehouses and mechanical handling equipment would be needed to help spread the wealth created over larger markets. Unemployment would be tackled by progressively reducing working hours.
Discussing the question "Will presentday warehousing concepts be obsolete by 1980?" Mr B. N. McKibben, a consultant, noted the recent trend towards purpose-built warehouses. Emphasis was placed on the "turnover phases of operation"; singlestorey warehouses were normal; assembly line picking techniques were well developed and there was much use of pallets, storage racks and other effective mechanical handling operations.
For the future, Mr McKibben said the role of warehouses must be based on their place in future distribution strategy.
The improvement of customer service provided by good warehousing might improve turnover to such an extent as to counteract the direct and indirect costs of the additional requirements. Problems arose in sales-oriented organizations in that more than the economic number of warehouses were required to provide an equitable level of service, to the detriment of operational Costs.
Mr P. Den Hertog, of Unilever, also examined the future of warehousing. He stressed the complexity of some modern warehousing operations. A brewery operation could have few lines, a high throughput to stock ratio and readily stackable products, whereas an automotive spares warehouse could have over 150,000 lines varying from nuts and bolts to doors and fenders and low throughput to stock ratio.
More warehouses than ever before were now being built, said Mr Den Hertog. One typical factory studied increased its production to an index figure of 160 by 1970 — compared with 100 in 1955, but the number of lines produced rose to 670, seven times as much as in 1955. Stocks rose to 240 tons or, expressed as percentages ofproducdon, from 9 per cent to 12 per cent, which was not bad at all. But because of a decrease in average weight per pallet, stocks in number of pallets rose to 370!
Because of the proliferation of lines the occupancy rate dropped. The effect was that the floor area needed rose to the index of 500.
In the meantime, building costs had increased so that an investment of £100,000 In 1955 had increased by 12 times by 1970. Hence, for only 60 per cent more production in tons, stocks expressed in pallet loads were nearly four times as high, floor area needed was five times as high and replacement value of warehouse, 12 times as high! This trend, said the speaker, would continue in the next 10 years.
Other speakers at the conference were G. Sarvary, who spoke on "The computer's influence", I. V. Idelson, whose subject was "Organizing and managing large projects" and J. Williams and D. Dagallier, who both discussed "Organizing for change".
During questions Mr Den Hertog revealed that the 1000nun x 1200mm pallet that was popular in the UK was rivalled on thr Continent by the Europallet, of 800mm x 1000mm. Unilever did not like this smaller pallet for its surface area was only 0.8 of the bigger pallet and it was much less stable when stacked. If the stackable height was only 0.7 of the bigger pallets the effect of the smaller pallets was that 39 per cent more would be needed. "If the UK joins the Common Market distribution management must keep this in mind. All attempts to change the policy have failed."
In a discussion on details of warehouse design, Mr Idelson stressed that with automatic equipment it was possible to define the necessary aisle widths for truck movements but if the human element was involved a variable was introduced. A Dutch forklift driver could manage safely with a narrower aisle than a Turkish driver. This sort of variable had to be taken account of where labour mobility, as in Europe, was a factor.
Mr Idelson stressed the revolution in distribution efficiency brought about by the introduction of roll pallets. Many firms still did not use pallets of any kind though they had been available for more than 30 years. He thought progress did not come immediately as a result of advanced research but, much more from imitation — the standard practice likely in 1980 was probably the pattern in two or three enlightened warehouses today.